The Different Types of Small Business Medical Plans
19th June 2009
People that work for small businesses or non-profits are usually offered various medical coverage options by the company owner. These plans covers just about everything, ranging from trips to the physician to prescriptions to hospital visits, etc.
To assist owners of small business make a decision as to what type of small business health insurance coverage fits best with the budget of their company and the requirements of those that work for them, the below offers guidance relating to the different types of plans available.
Indemnity plans – This type of medical plans generally include a deductible. The insurance company will start to pay the benefits after the covered person has met the amount of the deductible. Once the covered expenses go beyond the amount of the deductible, medical bills are often paid as a fraction of the actual expenditures, generally around 80%. These plans typically offer the best versatility in choosing where to go for health care.
HMO (Health Maintenance Organization plans – This type of self employed health insurance plans usually allows the insured individual to choose on a Primary Care Physician, or PCP, from a directory of network authorized providers. A PCP is the one that handles the health care of person covered. If the covered individual requires treatment from a provider not in the network, they need to get a referral directly from their PCP.
The person insured should receive treatment from a network provider in order to get paid by the HMO.
Preferred Provider Organization (PPO) plan – This plan is characterized by the provider making an agreement with specific physicians and hospitals to provide treatment at discounted prices. As a member of a PPO, you can receive medical care from a facility or physician outside of your network, but you most likely will have a co-payment or larger deductible amount.
Point of Service (POS) plan – This coverage gives a blend of a PPO and a HMO, yet is more flexible than HMO plans, but does need you to decide on a primary care physician. Similar to PPO, you can receive medical service from a hospital or physician not belonging to the network, but it is going to cost you more. However, if a primary care physician recommends you, the cost should be covered.
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